Impact of Big Five personality traits on tax non‐compliance intentions: Mediation effect of perceived tax‐fairness

• Published date: 01 December 2022
• Author: Suaad Jassem,Yasser A. Al‐Rawi,Adil Hussein Ali
• Date: 01 December 2022
• DOI: http://doi.org/10.1002/pa.2777

RESEARCH ARTICLE

Impact of Big Five personality traits on tax non-compliance

intentions: Mediation effect of perceived tax-fairness

Suaad Jassem

1

| Yasser A. Al-Rawi

2

| Adil Hussein Ali

2

1

Department of Managerial and Financial

Sciences, Al Zahra College for Women,

Muscat, Oman

2

Department of Accountancy, College of

Administration and Economics, University of

Anbar, Anbar, Iraq

Correspondence

Suaad Jassem, Department of Managerial and

Financial Sciences, Al Zahra College for

Women, Muscat, Oman.

Email: suaad@zcw.edu.om

Established behavioural theories have been used to study the impact of perceptions,

attitudes and behaviour on tax compliance however the literature have overlooked

the relationship between the personality traits of taxpayers as defined by the five-

factor model (FFM) on tax non-compliance. This study aims to fill this gap by propos-

ing a model using the FFM personality traits that examines the impact of the Big Five

personality on tax non-compliance intentions, and investigates whether the relation-

ships are mediated by tax-fairness perception. Survey questionnaire were collected

from 503 taxpayers working in various professions in Malaysia. Using structural

equation modelling to conduct the multivariate analysis, the results were determined

using Smart PLS. The results of the analysis indicate that conscientiousness, agree-

ableness and extraversion are negatively related to tax non-compliance intention,

while neuroticism positively influences tax non-compliance intention. Moreover,

openness to new experience had no significant effect on tax non-compliance inten-

tion. Finally, tax-fairness perception partially mediates all the relationships except for

openness.

KEYWORDS

Big Five, FFM, personality traits, tax evasion, tax non-compliance, tax-fairness

1|INTRODUCTION

Tax revenues are among the primary sources of income for most gov-

ernments around the globe. Without a steady revenue stream, for

instance through income tax, value added tax, sales tax, and so on, the

government machinery will not be able to function effectively

(Ghilarducci, 2018). Tax evasion or tax non-compliance manifests

itself when taxpayers hide their income and/or inflate expenses to

pay lower amounts in taxes than expected; such practises lead to rev-

enue shortfall for governments. Past research has tried to determine

the drivers of such tax non-compliance behaviour based on demo-

graphic features of taxpayers and other factors that were considered

from perspectives of economic theories and behavioural psychology

theories (Beer et al., 2018; Pukeliene & Kazemekaityte, 2016;

Walsh, 2012). An OECD-World Bank report on tax evasion reveals

that conventional approaches to combat tax evasion by threat of pun-

ishment have not yielded significant results. The report suggests that

research on determinants of tax non-compliance behaviour need to

delve deeper into aspects of human psychology that can provide clues

on how to develop more effective interventions (The World Bank

Report, 2018).

Research indicates that relatively fewer studies have examined

the relationship between human psychological traits and tax evasion

behaviour. Despite the fact that a recent study has looked at the influ-

ence of neuroticism, agreeableness and conscientiousness on tax-

payer compliance (Huels & Parboteeah, 2019), it appears that there is

a dearth of studies employing all dimensions of the five-factor model

(FFM) of personality traits developed by Costa Jr. and McCrae (1992)

to investigate whether dominant aspects of taxpayer personalities

influence tax non-compliance behaviour.

The FFM framework on personality is based on a set of five broad

human personality trait domains that are also referred to as the “Big

Five”in the literature: agreeableness, extraversion, conscientiousness,

openness, and neuroticism (Huels & Parboteeah, 2019). The

Received: 20 June 2020 Revised: 21 July 2021 Accepted: 1 October 2021

DOI: 10.1002/pa.2777

J Public Affairs. 2022;22(Suppl. 1):e2777. wileyonlinelibrary.com/journal/pa © 2021 John Wiley & Sons Ltd. 1of12

https://doi.org/10.1002/pa.2777